Recent research by U.S. Bancorp found that 82% of business failures are caused by poor cashflow management and inadequate credit control procedures. Beyond this, 39% of UK businesses spend up to 4 hours per week chasing invoices. Your cash flow is the lifeblood of your business. But in order to maintain healthy profits you need to have effective credit control methods in place. Here are some winning tips to help you:
1. IMPROVING CASH FLOW USING AUTOMATION
By automating the credit control process, you will gain a significant advantage over those businesses who employ outdated manual operations. Automation through advanced software systems, not only provides your business with accurate and precise debt chasing methods, but can also automatically notify its users of impending dates and payment deadlines. Credit control automation has a direct and significant impact on a company’s cash flow.
2. REGULARLY MONITOR AND COMMUNICATE WITH YOUR DEBTORS
Use advanced credit control software like LATERAL to keep an eye on all your debtors, including the age and status of their debts. The software can prioritise debts and communicate with your debtors on your behalf using SMS, Email, WhatsApp and VoIP. Communication is automated, organised, streamlined and ultimately reduces your labour costs.
3. REMEMBER TO HELP THEM REMEMBER
You should remind debtors when a payment is due. A polite reminder 7 days before payment is due is a much better method than aggressively chasing their debt further down the line.
4. REMOVE ANY MISUNDERSTANDING
Customers should not be confused about payment terms. Your customers might believe that they are paying within your terms, when in fact their payment is long overdue. So set out your terms up front and incentivize customers to pay on time. Consider offering discounts for early payments, and also introduce late payment fees.
Is credit control automation right for your business?
You can make a real difference to your credit control efficiency by employing these methods. The application of LATERAL’S technology will also make a tangible difference to your results. For more information about how LATERAL can automate your credit control processes, GET IN TOUCH.